There is a darkly humorous one-liner going around that says it all…”Taxpayers should vote Democratic, just like chickens should vote for Colonel Sanders (KFC) “. In either case the voter is sealing his or her own fate. Only days remain for you and I to change what is looming in our future. If we don’t put a mechanism in place to change the direction of our nation everyone can plan on living in a bleaker country.
As things stand in today’s United States of America, on January 1, 2011 every single one of us can expect to be placed squarely in the center of the taxman’s radar.
Because it takes the government the longest of time to do just about anything, our withholding instructions for the coming year are already being written. Remember, Congress left Washington without doing a thing to repair next year’s rates, so those tax reductions and credits everyone has enjoyed since the Bush Administration automatically end.
In January 2011 those in the 10% bracket move up to 15%. The people who pay their taxes in the 25% bracket will start paying at 28%; those who have been paying 28% will find their tax load has become 31%. Taxpayers in the 33% bracket move to 36% and finally the people fortunate enough to be paying taxes at the rate of 35% will find their bracket has risen to 39.6%.
Some other nice surprises will be waiting for us come January 1. The marriage penalty will return, making it more expensive for a married couple to file than two single taxpayers making the same amount of money. Along with that addition comes a subtraction. The child tax credit will no longer be $1000 per dependent. It will be cut in half to $500.
One other surprise awaits you if you have employer funded health insurance. The value of that policy will be added into your W-2 form as part of your taxable income. It matters not if you are working or retired, including those whose income or retirement checks come from the government or the military. They should not feel they have escaped this tax hit. Their health coverage will also be added into their income total.
One interesting Catch 22 is in this mix. Those workers, who have been just under that radar beam and have been paying no taxes, could leap foreword into a paying tax bracket if they have employer-paid health insurance.
Along with the changes already mentioned, those cherished itemized and personal dedications will start to phase out. The standard dedication will no longer be doubled for married couples, dependent care and adoption credits will end and the Death Tax returns.
The only solution to this nightmare scenario is for the GOP to win a majority in both houses of Congress. It is either that or a prayer for Colonel Sanders to reach out to all those chickens and treat them with loving kindness.